Coincheck Hot Wallet Hack Largest On Record: $530M In Crypto Coins Stolen

Coincheck Hot Wallet Hack Largest On Record: $530M In Crypto Coins Stolen

At around 3 a.m. Friday (local Japanese time), essentially all NEM, a type of virtual currency, held by the Tokyo-based exchange was illicitly transferred out of its digital storage. The theft has been reported to Japan's Financial Services Agency as well as to police, and the exchange is urging its peers to halt trading in NEM.

It eclipsed the 48 billion yen lost on the Mt. Gox bitcoin exchange in Tokyo in 2014, making it one of the largest losses incurred by a virtual currency as a result of fraudulence. However, there are certain cases where crypto exchanges and mining firms got hit by a hacking attack and resulted in the loss of millions from users' fund. Meanwhile, NEM, which is the tenth-largest cryptocurrency on the market saw an even greater decline, falling to a 10-day low of $0.775.

Regarding the amount of compensation for affected customers, the company only said, "We'll do everything we can to not cause trouble [to our customers]".

Jeff McDonald, vice president of the Singapore-based NEM Foundation, which created the currency platform, said in a YouTube video Saturday that the foundation is working with Coincheck to investigate the theft.

At the time that the theft was detected, the 58 billion yen worth of funds reportedly taken were worth a little over $500 million, and would have represented around five or six percent of the almost 9 billion NEM tokens in existence.

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Company officials said nearly all of the NEM currency it possessed had been lost, but added that it did not appear as though any irregularities occurred for other digital currency or in yen.

Finally, the hack of Nicehash, a bitcoin mining pool, in December 2017, was the most recent major theft of cryptocurrency before the Coincheck breach today.

After the exchange suspended deposits and withdrawals, NEM plunged more than 16 percent in a 24-hour period, according to CoinMarketCap.com.

Coincheck says 500 million digital coins were lost. As of January 17, there were 16 registered cryptocurrency exchanges in Japan, which has become a major player in the new field thanks to new legislation. This was followed by a similar suspension of trading for all cryptocurrencies, except bitcoin.

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